Navigating the Complexities of Cannabis Construction & CA

This conversation delves into the complexities of cannabis construction, focusing on the unique challenges faced by professionals in the industry. From navigating legalities and zoning issues to addressing security concerns and mechanical systems, the discussion highlights the multifaceted nature of building cannabis facilities. The importance of energy efficiency, the permitting process, and the impact of supply chain management are also explored, providing insights into the operational intricacies of this emerging market. This conversation delves into the complexities of cannabis construction, highlighting the importance of effective project management, quality assurance, and communication. The speakers discuss the unique challenges faced in the industry, including supply chain issues, managing client expectations, and the significance of power management systems. They also explore emerging trends in cannabis retail and cultivation, emphasizing the role of AI in enhancing operational efficiency. The discussion concludes with reflections on the industry's future and the rewarding nature of successful project completions.

Takeaways

• The cannabis construction industry has unique challenges due to legal and zoning complexities.
• Security measures are critical in the design of cannabis facilities.
• Mechanical systems, especially HVAC, are vital for successful cannabis cultivation.
• Energy efficiency and sustainability are becoming increasingly important in cannabis design.
• The permitting process for cannabis facilities is more scrutinized than for other types of construction.
• Lighting plays a crucial role in retail cannabis design and customer experience.
• Understanding local regulations is essential for successful cannabis projects.
• Collaboration with experienced trades is necessary for effective project execution.
• Architects must consider specific infrastructure needs for cannabis facilities.
• Power management and backup systems are essential for operational continuity.
• Effective communication among all stakeholders is vital for project success.
• Emerging trends in cannabis retail focus on unique concepts and hospitality.
• AI technology is transforming cultivation practices and improving efficiency.
• The cannabis industry presents significant opportunities for growth and innovation.

Chapters

• 00:00 - Navigating the Cannabis Construction Landscape
• 03:09 - Understanding Legalities and Zoning Challenges
• 06:00 - Security Considerations in Cannabis Facilities
• 08:54 - Mechanical and HVAC Systems in Cannabis Projects
• 11:59 - Energy Efficiency and Sustainability in Cannabis Design
• 15:03 - Permitting Process and Municipal Scrutiny
• 18:14 - Challenges in Construction and Supply Chain Management
• 26:27 - Navigating Complexities in Cannabis Construction
• 30:07 - Managing Change Orders and Client Expectations
• 32:51 - Supply Chain Challenges and Strategic Procurement
• 34:44 - Understanding Project Timelines and Quality Assurance
• 38:45 - Best Practices for Architects in Cannabis Facilities
• 40:37 - The Importance of Power Management and Backup Systems
• 43:22 - Effective Communication in Construction Projects
• 44:31 - Emerging Trends in Cannabis Retail and Cultivation
• 49:47 - Final Thoughts on the Cannabis Industry's Future

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Transcript

0:00

Now that the smoke has cleared, it's time to build a store that once sold a federally illegal product. Yeah, it's pretty complicated. From security vaults to zoning nightmares, CA and the cannabis retail is a whole new level of headaches. So how do we keep the project going? Let's get into it. Welcome to What The RFI, I'm Matt Brennan and this is the podcast all about CA. We're going to get straight into this one today. I'm really, really excited about this show. And this is something I personally haven't had a chance to design or be part of through the beginning of it. But I do have a very special guest on today's call. And before we get into that, I just want to explain the industry and David's going to correct me here. is the whole industry has really changed over the last six years, give or take, just with, you know, the policies come in place and so on. And of course, what the show is all about is construction administration and that plays a big role in terms of these types of projects. So with that said, enough said from me. Welcome to the show, David. Thank so much. Really appreciate doing this and been wanting to this for a while. So thank you very much. Yeah. Well, thank you for reaching out. You discovered the pod show, podcast and everything. yeah, and here we are. So as we get into it, put your plug in. Tell us about your company because that's really the show is going to be about that and the challenges that you face day to day in the construction world. Yep, great. Thank you. So my name is David Fetner and I'm one of the managing partners of grow America. We are probably uh be only if not one of the few national coast to coast design build firms that specialize exclusively in the cannabis industry. So all we do are cannabis projects. We don't take on, you know, schools or restaurants or build anything else, just cannabis. um We are design build. do consulting, project management, anything that has to do with the cannabis facility. We take care of. It's and I can only imagine the challenges and like I we're going to dive into that today. So like for the listeners, even myself too, because I know probably this much compared to what you know, because the history and you've been doing it for so long in that respect. Like, so right away. OK, so I just want to hire you right now to basically design a building to get going. So. Let's not talk about construction's point, but just kind of walk us through your typical process, what you would do different than any other architect in that sense. Well, first off, where right? Where are we going to do it? Because it's only legal in a certain amount of states, right? I think we're at like 22 or 23 states now. And once we say OK, it's legal in the state. Now let's go diving a little bit deeper. Is it legal medicinal or is it full adult use? And then I'll say, well, where else is the location? I have to look at the county and the town because just because it's legal in the state, let's say Michigan. That doesn't mean every town and county has opted in. Now we have to check the legality of the county. So you really go from the macro as far as what state into the micro, what's the legality in the township. You know, my background, I was a zoning attorney for 20 some years. So I look into the day one, what's the zoning of the property? This is another project. And then what are we building, right? Are we going to build on indoor cannabis grow? Are we going to build the dispensary manufacturing? No, back up for one second. There's three main components in the cannabis industry that us as architect and builders are responsible to build. have your cultivation facility, which is an indoor agricultural, just like any CES facility. you have your retail, which is a dispensary, which I'm sure, you know, many people are familiar with, but depending whether it's medicinal or adult use, those can be a little bit different. And then there's manufacturing, which is kitchens where you make gummies, chocolates, edibles, infuse, infusion. You're creating a vapes right for the vape cartridges. um You're doing, you know, tinctures, topicals. So those are the three main components. Sometimes they're allowed to be all under the same roof. Sometimes they're not allowed to be, again, it really goes state to state. And then like the actual within state to state, within, do you find within the cities it's a little bit different? Like again, you know, from, city to city, again, the bylaws, the zoning all definitely changes. Sometimes they don't even like so many years. different. Right. When we build in Manhattan, obviously, you know, you're going to be a lot closer to the next dispensary as if you're going to somewhere in the suburbs or in the rural areas, we have to be 1500 feet or 2000 feet. There's different distances between churches, schools, daycares. More dense town will waive those limits, right? So they'll say, well, we have, it's going to be impossible to do your business unless you're 500 feet, you know, or less from a school or daycare. Others, other cities say, well, we have to stick to the 1500 or 2000 foot, you know, guidelines. So it is very different and that's on the zoning part of it. And then you get into the construction and that's a whole nother ball game too. So with the permit, do you get clients that come to you and be like, Hey, I just got this retail space and I need you to outfit it. And you come in and go, it's a dead, like I can't do anything because there's someone out here. I'm so glad you asked. Not just that, but my heart sinks when a client comes to us and says, I have a signed lease of an LOI. Meet me at the site. I say, great. And I walk in and what you just described happens, but worse is if it's for cultivation, let's say, and I walk in and they only can have access to single phase power at 200 amps. There's no substation nearby. There's no way to bring in three phase. And I'm looking at them and I'm like, we were never going to get you a viable facility with what we have here as far as infrastructure. um You know, maybe some some operators come into that situation. They can afford a million and a half to 200, 200, you know, $2 million to bring power. But your typical operator can't afford that. The project is dead and now they're on the hook with the property. So it happens a lot. Right. And like in this whole process of kind of this planning and everything too, like security concerns, you know, does that impact the design of the construction? you know, whether it's theft, again, you've already talked about it can't be so close to schools and churches and all that kind of stuff because that's just, the community and parks. Anything else from a security standpoint when you're designing these facilities? Yeah, on the security part for retail, for dispensary, you have to have a special security film on the windows and glass. And back to 3M makes a really good product called Dentshield. But also it's like a cross between a jewelry store and a bank, right? um Every facility has to have a vault. You have to have limited access areas, key card, fobs. If you're in an area that's a little bit more high risk, you can take more precautions. If you have, for instance, let's say you have a neighbor and you have a joining, I don't know, restaurant or whatever, you have to put a barrier mesh on those demising walls. So nine gate security mesh. You really have to look at the whole components and a security package for a facility for either, doesn't matter, grow or dispensary. They're upwards of hundreds of thousands of dollars. Right. Yeah. Okay. Sorry. It's very interesting where you can't just, you know, get your license, get your permit and open up shop. You really have to think budget. I know everybody has to think budget, but especially in a cannabis type building, there's so many ancillary costs that go into it that if you don't really know, it could be a project killer. Right. And like, thanks for bringing up budget because like definitely like again, we're just talking about the planning side right now, like mechanical wise, that's a whole probably a different game. You're in your standard retail, your clothing, you know, GAP store or something like that. This is a different thing. And like you said, out of those kind of three categories, you know, you're going to, again, if you're growing, then that's a total different, you know, HVAC, you know, system. But even on the general one, are you finding that big changes? And again, that's where things can escalate. Yeah. Yeah. And on the retail side, of course, you're going to want to have climate control in the vault. Um, some towns still require order mitigation in the dispensaries. know, they don't want anybody walking by. The standard is somebody should be able to walk by and not smell cannabis. Right. Um, so how are you going to achieve that? Some towns have stricter regulations. There's known and definitely on the cultivation side, the HVACD is the number one most important component. Mm-hmm. But the odor mitigation system on that is as well, right? Carbon filters, positive pressure type system, sometimes use a high pressure fog system to really hit any type of exhaust with a 1000 PSI pressure that eliminate any residual odor. So there's a lot that goes into the mechanicals, the HVACD, because the dehumanification of the project is the most important part of anything. ah So yeah, the mechanicals, we could spend two hours going over the mechanicals and the CA on the mechanicals. And even electrical too, you're like you're lighting and all that. It's a product you want to sell it. You want to give that best. And it's going for a lot of money too. If you think about how much per pound, know, average is around 2,500 to $3,000 a pound. Some states it's less, some states it's more, but that's a very expensive commodity. So when we're designing these facilities and we're running CA on these facilities, we have to be so particular and so exact and so dialed in. Because if once the plants are in and the facility is commissioned, and things aren't growing right, they're looking at us, right? The designer, the builder, what's wrong? Could be hundreds of thousands of dollars in loss. ah We have to look how to mitigate certain risks such as mildews and mites and people bringing in different type of hazards. So we really have to design to every single what could go wrong question. Yeah, no, and you're right. like, kind of getting back to the retail and the lighting, one thing I, we were in Vancouver, we were doing the Shangri-La Hotel. And then of course, it was joined up with an urban fair. Well, urban fair was a knockoff from our typical everyday person grocery store called Save On Foods, but this was more the high end grocery store. So they spent beyond the standard, you know, just fluorescent tubes to basically spotlight that apple. So when you did look at it, and you're like, wow, that apple looks really good, even though it was the same Apple and any other grocery store, just, it's funny, but it is so true because it is lighting is so key. And I find architects that age, just missed that, you know, so many times that I didn't think about that. And when you have a product, a project that's just lit up, it's incredible. And retail got that from day one with anything. And again, especially in your industry, like you're saying, and so you don't cheap out on don't cheap out on lighting. On the retail side, we learned early on from one of the bigger companies, MSO it's called, it's a multi-state operator. They really put a lot of care and detail into their custom light fixtures and their architectural lights. um They thought they could cut costs on this or that, but lights, were not going to spare any expense. And people come in on the lights all the time, how it lit up the facility. um what you see when you walk in, adds a high end atmosphere to it. And so you have to have a concept that you stand out. And a nice way to do it, that was lights. And ever since then, I really spent a lot of time on the lights. That's awesome. That was really cool. And then like, as we're talking mechanical, electrical, the energy side of things, again, from state to state, how are they mandating like energy code challenges? Like, are you being forced to put in solar PV? There's all the, know, or you kind of flexibility or is there a good trade-offs between that when you're doing the design? That's phenomenal question. So obviously these facilities on the growth side take up a ton of energy, a ton of energy. um And right now you're still technically allowed to use HPS lights, although nobody really does. But to incentivize operators, every state's local power company has massive rebates, massive rebates for LED. So if you're buying, you know, let's say a $600 light, because each light is about 500 to$800. Some can go close to 2000, but they'll give you enough rebates where that light might end up costing you $100 or it may end up costing you nothing. Seeing that where customers have gotten their lights basically for free with the amount of rebates they've gotten back. The rebates also extend to the HVAC system. And of course with solar, that's becoming bigger and bigger in industry right now. Solar used to be very hard to run a facility off of. And still you can't do a whole facility off of solar. But the rebates that are coming with solar, it's the no brainer to install. And we're really finding good ways to utilize it, bank the power with solar, do like a hybrid system. um Energy is the one thing that we really haven't cracked a code on because there's no way to grow cannabis without using a lot of energy. It is challenging, like even with the schools we've done, like we've done the solar PV and that kind of stuff. We've done geothermal and then through the mechanical system. But again, that's a much bigger project. That's a $30 million school versus what you're... Well, I'll tell you what, the geothermal is interesting. We were working with a uh greenhouse company, right? Sealed positive pressure type greenhouse company. And they were utilizing geothermal. Phenomenal system. um It worked great. Problem was it's very expensive upfront. And cannabis, you know, an operator can't go and get a bank loan. It's all privately funded. They're paying very high interest rates, every penny counts. And so when you're going to put a project together, it may be great to use geothermal. The ROI may really work out long-term, but nobody has that capital upfront to spend on a system like that, unfortunately. Yeah, exactly. like you said, ROI and the return to investment too, they may only be doing it. They're hoping, they're in childhood. They want to do it for, that's their career goal, but maybe something happens where some pandemic or whatever, just, we put blockage or whatever the case is and that only lasts five years. And then the amount of debt that they was owing or anyways, yeah, exactly. It's a very expensive, it's for the long game to get your paybacks back. Yeah, very cool. And then I guess even the last question about kind of the energy stuff too, doubling up insulation, like we've got passive houses being built and that kind of stuff and that kind of same theory being put on commercial buildings of kind of doubling up the insulation, triple pane windows, just again to keep it cool, probably doesn't really apply in your case, or does it? Well, you know what we use so almost exclusively for the cultivation facilities, we use IMPs, right? Insulated metal panels. Yeah. Okay. You know, like what you'd see, know, what freezers or coolers are built out of, but but different, um you know, the the three inch, four inch, five inch, six inch thickness, sometimes even 10 to 12 inch thickness. um They have very high R values. And each room, each plant touching room is built out of these panels. Right. And it's great because it creates its own climate, its own atmosphere where you're not worrying about if there's a draft or if you have really bad R value at the roof, it's not going to affect the room itself. The room, the room is its own, especially a building within a building. That was a good point. Yeah, I totally, I hear you on that. It makes total sense. And the last question was, in this design phase, you're getting a lot of big pushback from the municipalities, like you're waiting for this permit. You know, what is the average lifetime of permit? And again, I'm sure it changes from state to state in that sense, but is there, yeah, some give you more troubles than others. You don't have to name the state. Absolutely. mean, with the permitting, every municipality is going to scrutinize a cannabis permit more than any other type of permit. they're still, even though it's getting such mainstream, there's still a stigma to it. Sometimes you're still going to have people who are going to complain. You're still going to have concerned neighbors. um So they're really going to dot the I and cross that T more than any other permit I've been involved in. Right. I built for 25 years, the scrutiny of a permit for a cannabis facility is unlike anything else. um And then on inspections, right? When you get final inspections too, you'll always know when there's that one inspector that is anti-cannabis. I think it's a bad thing for the neighborhood because the things I've seen that they've rejected as it would blow your mind. But yeah, I the permitting process and oh, you know what? Don't forget, we have to also apply through the state. So we're not just applying to the local municipality or the city. Permit plan has to go to the state, whether that's their department of agriculture or the cannabis regulatory commission. So a state agency has to review it, approve it. The local municipality has to review it and approve it. And then on inspection, same thing. State also has to come out and inspect after the city's inspected. So we're kind of. We're getting a double whammy all the way down the board. No kidding. That sounds like fun. How do you budget for that terms of... Exactly. It's, you know, the funny thing is we're used to it now. We've been, you know, guess we're in our eighth or ninth year of doing this. And so we're, for us, that's just the norm. But yeah, at the beginning it was hard to manage. It was hard to figure out our time. How are we timing out our general conditions? I'm going to figure out how much time to our construction administrator. Some of these can go on for, you know, a year, year and a half process, you know, before we even put shovel into ground. Yeah. So you get the issued for permit, you rejoice, you did it, plans are approved. You're ready to rock and roll. The client is paid, the client's really happy. Issue for construction and off to the races with us. So right off the go. eh Glorious day. Everyone's excited. Light up one. Here we go. At this point, what is going to be your first challenge? you right off the get-go. Like you talked about transformers, which you would have identified that, but if they did say, hey, we're going to go ahead, you would have been ordering that probably in advance of the permit. There's always setbacks, right? Just like in any construction project. But on the retail side, it's about a three month project, right? About 12 weeks. um You really, don't run into too many issues. There's always, oh, this was back order. There's custom mill work and that's not exact. But on the growth side, um what we do is because the plant patching areas are so particular, we have a separate plant touching project manager, right? That runs the plant touching areas. And then you have different superintendent for all the common areas because we always say, you know, what can go wrong will go wrong in a cannabis grow. It's very much a Murphy's law. So we really have to wash those areas very closely. um you know, we, I can run into so many situations where once we start construction, we fit this roadblock or that roadblock. I don't know how atypical it is to any other construction project. We all deal with, you know, speed bumps and hurdles we have to take. I would say just that one challenge that we encounter is you have the whole plant touching area that the problem is you don't know what you don't know unless you've done it. So you have to hire trades that have done it before, whether we're doing it in California or New York or New Jersey, the struggle is to find the electrician, the HVAC subcontractor, plumber, that has done fertigation, that has done maybe a VRF system, electricians that know how to hang the lights and set up the rooms and the automation. So that's where the challenge come into, is really the team. Right, it's a good point because like, and the one that challenges right off the get-go, like we were designing, we had 10 daycares being all built and they're all the same building, but just different sites and everything. And of course, we had the plague here, COVID and everything, and it was just killing the supply chain. like for us getting a Snyder electrical panel, yeah, it would have been three months before. This suddenly turned into 12 months. Well, these buildings were only supposed to be built in an eight month. project time period, right? So the first shop drawing that we were, you know, knocking at the GC's door saying, you've got to get us the shop, right? You should have got that the moment you signed up and we awarded you the contract, like, we need to get this reviewed, given back to you and do that. But the fact that you're dealing with electrical side of things, you're dealing with the HVAC, how are you finding the supply chain issues as of right now, in terms of timelines? But I'll even go one step further with that is you're also only as good as your vendor or your subcontractor, right? Ray, we can have shop drawings. They better order it when you give them the deposit. They better not sit on it or the vendor better order it. So you really have to make sure you're on top of it. Cause we've had that situation where we thought something was ordered back in two weeks later and oh, it hasn't been ordered yet. um And supply chain is one thing. You can always modify, right? We can always figure out, hey, maybe we get a generator trailer back up for an extra month or two, or we have to, you know, take power away from the non-essential areas and run the grow rooms. Because when we're doing a cannabis facility, the cultivation manager or the head grower has to know when he's ready to bring plants in. So he may be, he may have plants in a nursery. And if we say, okay, September 1, we can turn this place down. You can bring plants in. He's already growing in his nursery, ready to bring those plants at whatever stage, whether they're, you know, at the vet stage or maybe even ready to bring it to bloom. And if we're not ready to have those rooms turned on, those plants could be dead. He may lose them. He can keep him at bay as long as he can. But if we're delayed a month, two months, and we can't turn power on and we can't get lights going and we can't get, you know, HVAC system moved on, that's a big problem. So we always have to adapt. You know, I um was quoted a Rolling Stone the other day, had an article about you, how, how can you adapt as a emerging industry? And I said, you just don't say no, you know, no camping your vocabulary. You know, if electrician says it's impossible for me to get power to these rooms, I have to say, not let's find out another way. Right? Like I said, whether it's a generator or two generators or, turning off this whole side of the building or, or running power. you know, at night and then during the day, you know, kind of flipping it, have to, you have to find out a way to get those rooms on because like I said, it's such an expensive commodity. It's the, the, the risk of loss is what fuels us, right? To keep it, to keep pushing ahead and, know, So, yeah. And you meant one thing, I just want to kind of take a step back with the shop trying to stage. Cause again, in a typical public tender project, know, architects kind of leading it, know, GC submitting the shop drawings, review and all that. Well, you guys are a design build in that sense. you're not outsourcing an architect typically, or are you, or is there that odd job where you have to? Typically we're not, but there are certain specialties we have to outsource, of course. And I know that a lot of your conversations, you know, have to do with specs and CA, you know, we sometimes issue spec book that are 900 to a thousand pages for like a 30,000 square foot facility. And again, I don't know outside of my world, I never, I never did projects as large as we're doing now when I was doing my past projects. So. for me to see a 900 page spec book and every single page is used and utilized and reviewed, ah you cover a lot of bases there, but it's very important to make sure that you've got everything covered. Right, right. And again, being the desire. During the school, when you issued a spec book, um how large did they raise? Yeah, there were 2000, they were thick, you know, 3000. Yeah, exactly. Because then it was all your divisions, right? Because they went to the doors, your general material to your current wall, you know, millwork, interior glazing, you know what mean? The list went on, right? Because you're calling up everything. And because it was a publicly tender project, it's a little bit different. But again, with your design build, you've got a little bit more flux, you know, functionality just to kind of go back and forth and imagine the shop drawings are going to be turned around a lot quicker too because again you're not going through this kind of know. So we still have to scrutinize it because it's still at the end of the day, we have even a bigger liability that we're both the builder and the designer. So we really have to have a, we have a two step process for reviewing the shop drawings between our construction team and our architect. But you know, the public works, interestingly mentioned that. So I don't know if you're familiar, but the state of New York did a public works project for cannabis. It was the first of its kind. And we were actually one of eight firms that were awarded the projects. you're right. I think those spec books were twice the size of our typical one. Now that I think about that, they required a hefty set of specs. So yeah. Wow, that is crazy. And like, what about like RFIs too? Because again, you're the one you're talking with yourself. So you are issuing RFIs within your team, you're tracking those kind of... uh 100%, 100 % we are internally as much, if not more RFIs between our team. Because really we're going to get it back from the subs, but also we need to clarify things. And we've seen a lot of different ways these buildings have been built. They're not cookie cutters. So, you know, the facility we're doing in, like I said, California or Montana or New York, they're not the same. And even the ones within the state are not the same. They're all very different. all snowflakes. Right. the advice, we always want to make sure we're doing it right. And that's the thing like everyone and we can put a glass on the table and say, all right, describe the glass. Like you're going to see one thing and that's the same thing with the building. Like we're saying that there was daycares or whatever. There was 10 of them out there. Same building, same blueprints, not a single change other than one wall was stretched out, you know, a couple extra feet just to give it a couple of space for the kids. But anyways, At the end of the day, we got a variety of RFIs, even though it was the exact same plan. So same thing with you, it depends who's working on it. I would imagine again, you're building your A team, you know, in certain states, you've got that key, you know, team that rocks it. So they are not going to ask you other questions, but they're still going to ask you questions. But yeah, right. Again, sometimes it could be a greenhouse, not a warehouse build. Sometimes it could be a VRF system. Sometimes it's a package integrated unit. Sometimes it's a chiller system. So HVACD alone can be four or five different components. So yeah, we just want to be better safe than sorry too. Again, we've seen what goes on out there in the horror stories and we don't want to be part of any of those. So we just make sure we really, you know, dot the I's cross the T's. think I said it before. I'll probably say it one more time before we end this podcast. It's so important. Agreed. Now you probably get absolutely no changes from the owner midway construction, know, not a single one. Sure, never. Never. How do you talk Owners never want to change anything. No, they just like the way it is as you've already gone through and you've given 3D renderings and VR. of course. For that one client that does ask for change, how do you guys react? Is it usually not a big deal or is it just unfortunate? big deal. We try to be very user friendly. They want to make a change. It's their project. Our philosophy is as long as it's not going to detriment their, you know, their plants, as long as they want to do something crazy, like put a wet wall in a greenhouse or something. But if they want to make a change, they show a CEO, keep it reasonable and, you know, just move ahead. Yeah, exactly. No, that's pretty much every project in that sense. So we're in construction, we get it. We've talked about changes now, budgets, schedules, materials, everything. The world's upside down half the time, know, in the news, you know, it's always the tariffs are up and down. in the day, doesn't matter for me being from Canada and you're from, you know, the US and that stuff, it's still affecting both of us. You're still paying and we're paying it. It's not. Well, we did have a couple of projects that were launching right when the tariffs were becoming an issue. We were able to get a couple orders in beforehand. um And we told the client, know, they weren't really ready for the deposit yet, but we said, hey, we get deposited now, we avoid any possible tariffs. um So that worked out well. And then we have another supplier that they keep tens of millions of dollars in inventory. Good. we got lucky, but again, a lot of parts for the lights, almost exclusively. I don't care if the lights made in the USA, but parts come from China. So, you know, the lights, the security wiring, steel, that all get affected. But right now I don't see it as a big issue. Again, I think things have come down a little bit ah and we're getting enough notice from the suppliers too, that if there is going to be an increase, at least, you know, we're able to put it the budget and the clients aware. Yeah. So like one thing you mentioned about you had a supplier doing it, but what about like, cause when I was building my house, I went and basically my AC and all that stuff, I wanted to add AC to my place and the guy could come out the next day and I was shocked how quickly he could react. And he said, Matt, I've got a warehouse full of items, know, full of it. And he literally did. He has, he pre-bought everything. Are you doing the same thing with some stuff? Are you pre-buying stuff? So you've got it in your warehouse or is that just not a thing? Yeah, you know what? Not right now. We're not. um I don't really see much of a need. During COVID we did. During COVID we saw that there was a need for doors and frames. We had long lead times on doors and frames. It affected a few of our projects. So we were able to stockpile and buy, but we were doing a lot of dispensaries at that time. If you remember, it actually, it was an essential business, dispensaries, especially the medicinal ones. So we were allowed to keep working and we just stockpiled and made doors and frames as we could so we wouldn't have those issues again. Right. Yeah. And then, yeah, we talked about lead times and so was there any other kind of high level lead times that are just really, really tricky for your projects? You know what? The only two things right now would be electrical gear, which I think everybody in the industry has the same issue. And then those panels I was talking about, those insulated metal panels, those sometimes we 14, 16 weeks out, you know, there were some HVAC systems and companies and I won't name them to drag them, but you know, they were, you know, some of them were like 58, 60 weeks. Crazy that. you're over a year out. um And even even those came even further delayed. So those affected some projects, some of the big brand names in the industry, the go to so it's hard to deviate from them. Now there's options, but that was again, that's right coming out of COVID. Right, no, exactly. that's hopefully things have gotten better. But yeah, because it would, and you kind of mentioned it earlier, but what is the average once you get the green light to go construction? And again, I know this is a vague question because it depends on, know, if you basically if you kind of take the three categories, the three type of buildings, what is kind of the average between each one? Great question. So average dispensary is 12 weeks. Some can be done in 10, some are 14 or 15, but that's the average. That's a confident answer. A cultivation, the sizes range. There's such a variable in the size, but I'd say average would be eight to 12 months on an indoor cultivation project. And then on a manufacturing three to four months, okay. Overall, it's not crazy timelines for... No, it's really not. um You know, obviously if you're doing a hundred thousand square foot canopy, right. And when I say canopy, that's the flowering rooms, the bloom rooms. That's probably closer to two years, but average project is again, you know, anywhere between eight to 12 months for a good indoor grow. Right. And because you've been doing it so long too, in terms of these timelines and quality assurance is really key because numerous times they say if things aren't done right, the product's going to turn bad and that's a huge loss. of course, again, if I was your client, you know where I'm going to be coming. Of course. I'm going to be knocking on to that. And there's even projects where we may not be the designer or sometimes we're just hired as the general contractor or project manager. And there is a different design team on board. um And even then fingers are pointing everywhere, right? um Luckily knock on wood, haven't had those issues, but it's always in my head, right? Again, I think being trained as an attorney, I'm always looking worst case scenario, mitigate risks and that kind of, goes my strategy with my team also, let's double check, triple check. This, look, this isn't like building a restaurant, right? You build a restaurant, you're delayed one or two months, grand opening is delayed a few months, right? uh With this, if you're delayed a few months, you could have hundreds of thousands of dollars dying across the other side of town. Yeah, much different than that. yeah, like I said, so you guys have your own quality controls, you got your checking, you've got everything, make sure that. Well, that's why I said, yeah, that's why we really have a separate project manager just for the plant touching areas. That way they're able, they've been through these, they know these types of facilities. A lot of times they have a grow experience themselves, right? They're cultivators themselves with some construction backgrounds. So they're able to talk to the client's grower, able to know what most guys wouldn't know, right? uh Know how to anticipate any issues. And when everything's put together, and we got a CFO, we still take three weeks before we allow them to implant. And because you want to commission the system in cannabis construction, commissioning is maybe the most integral part of the project when it comes to CA. OK, you really have to dial in the system. have to have everything run. You have to make sure your lights, your fertigation, your automation, your D. Humes, everything's working together. so that it's hitting the right temperatures, hitting the right humidity levels. So when you bring those plants in, there's no lag time. You don't wanna be dialing it in with the plants in the room. Right. You probably got like, even with these systems, you've got alarms triggering too. So like if I was a client, was out wherever I was on holidays, they would start flagging me, you know, in the middle of the night or so. 100%. You know, it even happened a few weeks ago with the client. Um, that one of the rooms lost power. So they got an alarm immediately. They called us what's going on. We came, a breaker was tripped. I think it was some just random reason that, but they knew immediately soon as that breaker got tripped and lost power, they knew as soon as the humidity, you know, hits a certain level, that's not optimal, but get an alarm. The cool thing this these days is everything is on their phone or tablet. So they can see each room and each sector of the room, what everything's running at. It's really cool. That is super cool. Yeah, I think that's awesome. Shoot, my mind just dropped the floor. There was another question about alarms and that kind of stuff. But anyways, no, that's really cool. And with it, is there any advice, lessons, best practices that you want to give to architects, like stuff that you've seen, again, crazy RFIs, challenges of like, what the heck moments and put it place? what I, so I go and I speak at different conferences and expos and really the crux of what I do is, know, what the pitfalls to avoid, right? And it already goes down to the building before client, you know, commits. And I said this earlier, there's a checklist that really makes an optimal facility and right. Retail is retail again. It's fairly simple, but on a grow, you want to make sure you have the right ceiling heights. the right roof stability, know, infrastructure of power. You have to make sure you're correct drainage, right? Cause every room has to have a floor drain. So it's really making sure the infrastructure of the building can, can take on the type of facility you want to put in there, whether it's 5,000 square feet of canopy or 50,000 square feet of canopy, or it all comes down to the type of building, but it's not every building is optimal and money's so scarce that If you have to put an extra $250,000 into the project because you have to upgrade the building somehow, you know that could be a deal killer. No, exactly. And kind of going back to the point of alarms too, and just thinking, you might have mentioned it, but are you always recommending putting generators in these projects? Because like you said, if power's going out, the last thing you want to do is lose that, has that secondary defense. Is that something you're doing? Yep, it's funny. like I'm talking about the building and the checklist. You one of my due diligence items is what's the power grid like? It's an area that's kind of near the shore where the hurricanes blow in and you lose power or are you more inland and rural where it's just not a great grid. um So I asked what the grid is like. And if the answer is. We lose power once a year for a few weeks at a time and say, OK, we have to get a generator and these generators, you know, these are. half a million, a million dollar generators. These are very large generators, but you don't have a choice because you can't let the rooms go down. You have a pretty good grid. Then what I recommend and advise is, you know, sign a contract with a generator company so that you're first on the list. If you lose power, they back the trailer right up and you plug in. But every facility has to be generator ready. Full stop. And that totally makes sense. Again, that's one of those things that sucks that is, you know, an extra million that you didn't weren't thinking of budgeting for. But the reality is what's inside that store or in that, you know, that operation building. it's cheap insurance at the end of the day. Right. Right. And we make sure they budget forward in the beginning, you know, like, that's always a budget. Number one generators in there. And just a matter of what's the state of the grid, whether we need to do a permanent rooftop or a generator, you know, off to the side or, or whether it's going to be a trailer that gets hired. And then through the construction process, communication and all that kind of stuff, again, you guys are again, a design building in that respect, you guys probably got a really good system in place when it comes to that. Again, that all goes back to the quality assurance, like you've already talked about higher end, you know, so again, any kind of tips. our, our, our communication is obviously, you know, we have our four team, you know, we have our, our vice president of construction. He was, more like the general manager, our project manager who's, he's like the head coach. I always say, if you go football rules and then our super is like the quarterback, right on site. But communication, we're dealing not just with the owner operator, but their head of cultivation always has a seat at the table. They're very involved in the construction process. Obviously we do weekly construction meetings. We run everything through a pro core project management system, we're constantly in communication with their head grower, head grower and, or, you know, cause cultivation manager, because they need to know when can I bring plants in? That's all they care about. What stage are we at? But even when we're putting in the benches and the racks and hanging lights, we have to have outside meetings. Hey, how does this line up for you? This is the height of the lights. Here's your They really have to be very involved in all the plant touching rooms. Right. Yeah. No, no, it totally makes sense. kind of, God. But like I said, communication is key on the grows, you know, with the people who going to be in charge of the plants. hungry and it wasn't just any project too but I think yeah yeah every project that communication is really and I think that's the one thing it is important thing, good or bad, right? You need to bad news just as much as you need to have good news. I love that quote. really do. Cause you're right. It's just the state and the nation. What is it? How do we get through it? Let's just rip the bandaid off, into it and figure it out versus finger pointing vigorous, anything like that. Let's just deal with it. in my younger self hated to give bad news. And I'd keep it in and I'd deal with it internally. And sometimes it would just, it turns into something bigger than it could be. So the older me, right? The bald or me, the gray or me, now gives the bad news head on if there is bad news. That's awesome. I love that. do. So, kind of shifting here, future trends, you know, in the kind of retail construction, you know, again, it's come a long way from where it was out of the back of the van, you know, from Jimmy, whatever. And now you've got actual facilities and everywhere is different, you know, like you've kind of got this new defining moment. You see it kind of changing, like a lot are unfortunately are blocked because the city won't allow them to, you know, open up and keep the windows, know, you got, like I said, you got a tent. there any kind of that, you know, is something new age or that they're trying to do? Absolutely. I mean, on the retail side, it's a lot of cool concepts, right? Now it's about what's your concept to differentiate you. So it's not so much that cannabis is, oh, it's new, there's real line down the block. That doesn't happen anymore. There could be three dispensaries in your town. So what concepts are going to differentiate your dispensary from the next one, right? So design concepts is very important. Cannabis hospitality is becoming huge. Okay. um You're talking about, you know, yoga studios where can have consumption ah or, you know, uh there's a consumption lounge up in New York. They bring people in for movies or car night. Everybody brings in their cars. uh There's hotels that specialize now in cannabis consumption, uh restaurants. So events, you know, in Minnesota, they just released a bunch of licenses. You get event license attached to that. So you can have a concert or stand up comedy night. with open consumption. So cannabis hospitality, it's really coming into its own now. I think you're going to see a lot more cannabis centric um lounges. And with that comes different types of construction and CA, ah built like a cigar lounge, right? With a really heavy duty exhaust, ah with kind of that bar feel. ah So I think the retail side, concept is important. We have hospitality coming into play and on the cultivation side, AI is here and it's very cool what AI is doing into these cultivations facilities. It's going to really help the grower. It's a tool. It's not taking away anybody's jobs, but what it's doing is allowing you to really increase revenue by almost 30 % from what I've seen and avoid all the risks that you've seen where, For instance, uh what a lot of operators are afraid of is their plants getting like spider mites, right? Or powdery mildew. What the AI can do is, you know, it's basically like a, well, iPad that kind of hovers over the plant all day long. And it'll identify those potential risks 10 to two weeks, 10 days to two weeks before the grower can identify it with their naked eye. So imagine if you're an operator, you're able to recognize that this room or these plants have powdery mildew two weeks before, you know, a human can, and you can cut your losses and mitigate that. You could save this whole side of the crop. Think about how important that is. huge. like, it's incredible whenever that there was something that was being on one of the news articles about like breast cancer and it's kind of seen that and like, just again, it's not, it's not crippling anyone because it's just like flagging. It's like FYI, you may want to look at this. Let's bring you back in, you know, in three months. It's a tool. It's, and it's very cool. I'm, I'm, I'm really dedicating, you know, the second half of the year to learn as much as can about the different type of AI that we have in the industry. you know, I want to be at the forefront of it. I don't want to have to be, you know, catching up. Yeah, no one you don't and I've done a number of talks on CA and AI and then that workforce and everything. you had a podcast on AI think a few months ago. Yeah, that's right. Yeah. So I talked about that and yeah, like for you guys, the builder, the dusty, the robot, there's even another one too. There's one that hangs drywall now. Like it's just, it's, it's advanced. But I like what, I haven't heard that one. I know, because I fly drones and everything too. And there was, you can definitely use that for the agricultural too, right? Or you can just fly a drone and go like, how many trees are there? And it'll just automatically count and just, just wild. Yeah, no, it's, it's, blew my mind when I got the beta test on it, it, the data that it turns out it's, and then the growers can't believe it. They like, they're like, you got all that just from, you know, I mean, to the point of, you know, cannabinoids and THC levels. And it was, it was very clean. This is just the beginning of it too. So AI is, is something that I'm very excited about on the cultivation side. That is really cool. Yeah, absolutely. It just stops waste and yeah, and so many benefits. Yep. So as we're kind of wrapping this show up, final thoughts, anything, know, last remarks on this whole process. I really appreciate it. Like I've learned so much today too. And it's definitely someone thinking that just going to jump into it. Whoa, whoa, whoa, whoa. You know, there's a whole level of science here. It is, there's so much to it. There's so many moving parts. think everybody in the industry would say it's, it's still a grind, right? It's very hard to get access to capital. The projects take a long time to get started. But when we go to those ribbon cutting ceremonies, it is by far the most rewarding experience because you know, from, from the client even getting their license, right? Which probably took them years. Then to get the project designed. then to get the capital raised, then to get those permits with the state and the city, then to get through construction. When you're cutting that ribbon, it is unbelievable. um And so I just think let's keep the optimism out there. um It's a great industry. We're all in on the ground up, um the ground floor, going up, but um it's a good place to be. That's cool. Well, thank you for saying that and for sharing all this. This is awesome. I really, really appreciate you on the show, David. For the listeners, where can they find you? So again, you have Grow America as the company, growamericabilders.com is the website. And you go to the website, it's got my direct number right on there. Reach me, call me. That's my contact. And we have office in Chicago, New York, New Jersey, and Phoenix. So we literally go coast to coast and we'll come up north of the border too. I've put out bids in Toronto as well. So, oh yeah. We'll work anywhere. tell you, we've actually put out bids in Portugal, Sri Lanka, and Lesotho. you know, wherever there's legal cannabis, we will go. You're international. Like that's crazy. Yeah, thank you. Yeah, no, appreciate this. It was awesome. yeah, like anyone listening has more questions. You've got an amazing source right here. So I'm gonna wrap it up with that. Thank you so much again, David. Really appreciate it. And architects keep designing, contractors keep making those blueprints reality. We'll see you on the next one.